Maximizing Donor Retention: Key Findings from latest FEP report

Each quarter the Fundraising Effectiveness Project (FEP) releases aggregate views of the current year’s fundraising data. Much of the data collected and analyzed focuses on donors – donor size, donation count and type (new, repeat or recaptured). These reports serve as useful benchmarks for nonprofit leaders, staff and researchers long before the full year’s data is available.

The latest report released in August (Q1 2023 Report) signals waning donor engagement at all levels and an immediate need for greater donor stewardship. Relative to last year, both dollars and donors are down (Giving in 2022 decreased slightly from the previous year, which was the highest on record). In the first quarter alone, FEP reports a 0.7% decrease in dollars raised and 3.8% decrease in donor participation. Donor retention is one of the few areas with marginal growth (1.3%). Retention rates across all categories of donors decreased, with the largest donors ($50,000+) demonstrating the greatest decrease in retention (-6.1%). Last year’s average donor detention rate was the lowest on record (42.6%), and early fundraising results for 2023 point to ongoing challenges in this area.

FEP’s report indicates the urgent need to keep your donors close by strengthening personal relationships and keeping donors invested in the mission-driven work of your organization (For more on donor retention, see “Retain Your Donors in 5 Steps”). How can you both retain donors and ensure your organization is their philanthropic priority? Good news: There’s still time to put strong stewardship practices into action and position your organization for success heading into 2024 (see our webinar on Year-End Fundraising with High-Impact Results).

Show and Tell – Get your donor(s) onsite to see first-hand the work and impact your nonprofit makes in people’s lives and your local community. An individualized approach is best to foster 1:1 relationship building. You want an opportunity to show the work you are doing, to generate excitement and to learn donors’ interests through discovery questions (For example, “What aspect of our mission most excites you?”). Site visits also present a chance to turn the mic over to programmatic staff. Bringing colleagues from outside the advancement team into the conversation often enriches the dialogue and makes for an even more memorable experience. For organizations less conducive to site visits, consider pop-up events at Board members’ homes or in libraries or community centers.

Expressions of Gratitude – People appreciate being thanked, and a timely acknowledgement from your nonprofit should be standard practice. Go above and beyond the basic acknowledgment by including a handwritten note from a board member. Help with saying “thank you” is a great way to engage your board through correspondence and phone calls. Consider organizing semi-regular “thank you phonathons.” Provide your board members with a contact list of 10-12 recent donors and have them call to say “thank you.” Our firm has seen the most hesitant of board members quickly come to look forward to making these calls. Especially for small, understaffed organizations, these volunteer hours can transform donor stewardship and provide critical staff augmentation.

Short but Sweet – One of the best ways to build affinity for your nonprofit among donors is to keep them informed in meaningful and thoughtful ways. Engaging donors does not need to be elaborate or time consuming. One of our clients, a human services organization, does monthly 30-minute virtual “tours,” which include an introduction and welcome from the director and short, 5-minute testimonials by people whose lives have been positively impacted by the organization: their clients, family members, staff and volunteers. Their only “ask” is to spread the word about these monthly virtual tours, and to invite a friend next month.

No matter which strategies you use this Fall, keep your donors close. Make sure they know the meaningful and impactful work your organization is doing with their dollars before an end-of-year ask.